Most people are now familiar with the story of how Arsène Wenger first impressed himself on Arsenal vice-chairman David Dein, by tagging along to a dinner party and not being fazed when asked to mime the title of A Midsummer Night's Dream in a game of charades before an audience of perfect strangers. An image of elegant composure under pressure lodged itself in the back of Dein's mind and, although the coach had moved from Monaco to Japan by the time Arsenal realised Bruce Rioch was not working out as a successor to George Graham, the club were by then ready to look overseas. The rest is history.

Well, it is now. Arsenal already had the most wanted manager in European football before they raised his profile even higher by going through a Premiership season undefeated, but eight years ago Wenger had to prove himself. The Arsenal dressing room had proved too big for Rioch to handle, so how did the Frenchman with the funny accent and the oddly apposite Christian name go about beginning his overhaul of the club?

'He intellectualised to the players,' Dein explained over lunch last week. Come again? 'The biggest problem for any manager nowadays is motivating multimillionaires. Arsène reminded the players it said professional footballer on their passports and invited them to behave like professionals and be the best. He told them they could carry on with the burgers and the lager and end up in the Third Division, or adopt his philosophy, extend their careers at the top level and make a few million quid. They listened to that. It's no secret that Arsène was not impressed with the culture he inherited. So he changed it, revolutionising the club and setting new standards in English football.

'Everyone is at it now, the diet and so on, but that's fair enough. We progress when we all learn from each other. If you ask Steve Bould or Tony Adams, or Martin Keown who is still up for another Premiership contract at the age of 37, they are all physically and mentally in good shape. Mentally is very important these days, it is not just a physical game any more. That's why a lot of clubs employ sports psychologists. We don't need one, Arsène does the job.'

That would be in addition to Arsène's other jobs of making Manchester United's life a misery, scouting opponents, sourcing top talent from all over the globe and transforming players discarded by other clubs into world-beaters. Dein does not like to boast, you understand, but he can quote a few statistics.

There are 10 nationalities in the current first-team squad. There have been 102 first-team comings and goings under Wenger, at an overall transfer deficit of £40million. That averages out at around £5m per season - not bad given the success rate and the fact that Arsenal made £56m from television and prize money this season alone.

So successful has Wenger been that Arsenal cannot bear the thought of losing him. They recognise the allure of Real Madrid, even though Wenger has shown no sign of responding to Spanish overtures, and when he tires of coaching they hope to persuade him to stay on in a supervisory role to continue guiding the club.

'There are clubs around with more money, but I would like to think Arsène thinks he has things still to do at Arsenal,' Dein says. 'He has assembled a team behind the present team, we have a whole side of players under the age of 23 waiting in the wings because that's the sort of long-term view he takes. He is not a big spender in any case. He plucked Kolo Touré from obscurity, Patrick Vieira couldn't get into the AC Milan team, Thierry Henry was out of favour at Juventus and about to go on loan to Udinese.

'Just spending money doesn't guarantee success, it only guarantees high wages. I'm not against paying the going rate if Arsène thinks the player is worth it - we spent a lot of money on Jose Reyes, for instance, but we got him young with a lot of years in front of him. I wouldn't criticise Chelsea's philosophy, because they want success and eventually they will get it. If they carry on they will have a talented squad, albeit an expensive one, and if they get the team spirit right, who knows? It's not a level playing field financially, but there's nothing you can do about that except try to be more astute in other ways.'

Dein feels that Arsenal have been punching above their weight for the last seven seasons, emerging with more success than a club with a limited budget and a capacity of 38,000 has any right to expect. Even Herbert Chapman could not claim three titles in seven years and, with Wenger's long-term planning beginning to take hold, it can only be a matter of time before Arsenal's influence extends to Europe. As long as they can take the move to a new ground in their stride.

Liverpool's domination of the 1970s and 1980s was neither lavishly bankrolled nor based on an enormous capacity, but though Dein takes the compliment, he points out time has moved on. This is the modern world, and Arsenal are taking the chance to move into a new 60,000-seat stadium.

'You can't keep on punching above your weight,' he says. 'Of course it's very sad to leave Highbury, it's home. But if we want to compete with the best we cannot remain. Staying at Highbury means settling for being an average club. You become a big club by history. You have to build it up; it's not one win or one season.'

After deciding against becoming tenants at the new Wembley, in order to stay in Islington, Arsenal believe the Ashburton Grove project, variously estimated at between £250m and £400m, will propel them forward sufficiently without dragging them back. It has been a difficult task, both in terms or finding land in central London and pitching the capacity of the new ground right, not to mention raising the money without impinging on the present team budget.

'The financing of the sta dium is ring-fenced. It should not interfere with what goes on on the field of play,' Dein explained. 'If we lose predicted revenue [dropping out of the Champions League, for instance], it would make things more difficult in that we might need longer for repayments, but the club itself would never get into a situation where the building of a new stand or a new stadium would bring it down. Obviously it is a heavy burden financially, but we had no real alternative if we wanted to compete at the top. If we want to be ambitious, the stadium is the answer. I'm not sure now that 60,000 will be big enough, if we have a successful team. We've got 25,000 people wanting to buy season tickets. You have to put a ceiling on it because otherwise you have a sterile audience. If the same 40 or 50 thousand season-ticket holders watch you every time, you don't get fresh blood. You want to bring your kids. I remember distinctly when we played Champions League games at Wembley I had fathers coming up to me, with their kids, saying they didn't think their kids would ever get the chance to see Dennis Bergkamp play.' Bergkamp is another of the Dein era's conspicuous successes, taking his place alongside Wenger, Henry, Vieira and English football. English football? Dein was one of the prime movers in the breakaway to form the Premier League. And although this might not have been a vintage season all the way down and the overall quality might trail behind Spain and Italy, there is no doubt things have changed here since the Premier League came along. The grounds are full, the entertainment vivid, and leading overseas players want to come. Like Arsenal, England must be doing something right.

The proof, Dein insists, is in the profits. 'Just after I had joined the Arsenal board in 1983 I went to one of my early football-league meetings and we were talking about television rights,' he explains. 'English football, in the pecking order overseas, was number five. First was Italian, then Spanish, then Dutch, German and English. Now we are number one by a street. The Premier League outsells the rest of the competition around the world. Any foreign manager will tell you he loves the passion, the verve.

I've been to Real Madrid and if they haven't scored after 30 minutes there's whistling, there's the white handkerchiefs starting to come out; they are so used to it. English football is passionate and unpredictable, and that's why the world wants to watch it.'